ex10-1.htm


    
      
        

      
Exhibit 10.1


      EMPLOYMENT
AGREEMENT

      


      THIS AGREEMENT is made the 1st
day of August, 2008.

       

      BETWEEN

       

      
        	
                (1)  

              	
                Pacific Asia Petroleum, Inc.,
      a Delaware company headquartered at 250 East Hartsdale Ave., Suite
      47, Hartsdale, New York 10530, U.S.A. (the
      “Employer”);

              


      

      


      AND

      


      (2) Richard Grigg, an
individual of Unit 10 E, 10/F, Kaiser Est. 1, 41 Man Yue Street, Hung Hom,
Kowloon, Hong Kong (the “Employee”).

      


      


      WHEREAS
IT IS AGREED AS FOLLOWS:

      


      
        	
                1.

              	
                APPOINTMENT

              


      

      


      
        	
                1.1

              	
                With
      this Agreement, the Employer shall employ the Employee and the Employee
      shall serve the Employer in the capacity of Managing Director and Senior
      Vice President of the Employer on the terms and conditions hereinafter
      appearing.  The Employee hereby agrees and acknowledges that
      this Agreement is a new employment agreement and not an extension of any
      oral, written or implied employment agreement that may have existed
      between the Employee and the Employee prior to the effective date hereof,
      and the Employer and the Employee further hereby agree and acknowledge
      that upon the mutual execution of this Agreement, that certain Employment
      Agreement, dated March 21, 2008, previously entered into by and between
      the Employer and the Employee is hereby terminated as of the date of this
      Agreement.

              


      

      


      
        	
                1.2  

              	
                The
      Employee’s term of employment under this Agreement (the “Term”) shall commence on
      the date of this Agreement and shall continue for a period ending on the
      third anniversary of such date, unless sooner terminated in accordance
      with the terms of Section 8.1.

              


      

      


      
        	
                2.  
      

              	
                WORKING
      LOCATION

              


      

      


      
        	
                2.1
      

              	
                The
      Employee shall provide his services to the Employer based out of the
      Employer’s Beijing offices located at Yi, No. 118, Jian Guo Road, Suite
      1809, Jing Hui Da Sha (The Exchange Building), Chao Yang District,
      Beijing, 100022, PRC, and such other locations where the Employer or its
      subsidiaries or affiliates may conduct its operations.  The
      Employee further agrees that, in connection with the services he is
      required to provide under this Agreement, that he will be required to
      travel frequently at the request of the Employer.  This
      Agreement shall govern the terms of the employment of the Employee
      wherever he provides the services he is required to provide under this
      Agreement.

              


      

      



      
        
           


        

        
          Page 1 of
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                3. 
      

              	
                POWER AND
      DUTIES

              


      

      


      
        	
                3.1

              	
                The
      Employer agrees to employ the Employee as the Managing Director and Senior
      Vice President of the Employer.  In his position as Managing
      Director and Senior Vice President, the Employee will have responsibility
      for managing the Employer’s activities as appropriate and as required
      under the guidance of the Employer’s Chief Executive Officer, and he shall
      have such duties, responsibilities and authority as shall be consistent
      with that position. The Employee shall report to the Chief Executive
      Officer of the Employer, and follow his instructions and also instructions
      from the Employer’s Board of Directors. During the continuance of his
      employment hereunder, the Employee shall devote his full time, attention,
      knowledge and skills, and to the best of his ability, in furtherance of
      the business of the Employer, and shall faithfully and diligently perform
      such duties and exercise such powers as may from time to time be assigned
      to or vested in him by the
Employer.

              


      

      


      
        	
                3.2

              	
                The
      Employee shall devote his full-time services exclusively for the Employer,
      and shall not during the continuance of his employment, either directly or
      indirectly, and whether as principal, servant, agent or otherwise be
      engaged, concerned or interested in any other commercial work unless such
      other commercial work shall have been specifically disclosed to, and
      approved in writing by the Employer, and a written arrangement concerning
      such other commercial activity has been arrived at with the Chief
      Executive Officer.

              


      

      


      
        	
                3.3

              	
                The
      Employee agrees not to bring with him to the Employer, or use or disclose
      to any person associated with the Employer, any confidential or
      proprietary information belonging to any former employer or other person
      or entity with respect to which the Employee owes an obligation of
      confidentiality under any agreement or otherwise.  The Employer
      does not need and will not use such information and the Employer will
      assist the Employee in any way possible to preserve and protect the
      confidentiality of proprietary information belonging to third
      parties.

              


      

      


      
        	
                3.4

              	
                The
      Employee shall hold and keep confidential for the benefit of the Employer
      all secret or confidential information, files, documents and other media
      in which confidential information is contained, know­ledge or data
      relating to the Employer, or any of its subsidiaries or affi­liated
      companies, and their respective businesses, which shall have been obtained
      by the Employee during his employment by, or consulting engagement with,
      the Employer (“Confidential
      Information”). Confidential Information does not include
      information that is already public knowledge at the time of disclosure
      (other than by acts by the Employee or his representatives in violation of
      this Agree­ment) or that is provided to the Employee by a third party
      without an obligation with the Employer to maintain the confidentiality of
      such information.  After termination of the Employee's
      employment with the Employer, he shall not, without the prior written
      consent of the Employer, or as may otherwise be required by law or legal
      process, communicate or divulge any Confidential Information to anyone
      other than the Employer and those designated by it.  The
      Employee shall not either during or after termination of his employment
      hereunder use to the detriment or prejudice of the Employer or divulge or
      communicate to any person or persons any trade secrets of the Employer or
      any other Confidential Information
      which he may receive or obtain in relation to the affairs of the
      Employer.

              


      


      
        
           


        

        
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                3.5

              	
                The
      Employee expressly acknowledges that any industrial and intellectual
      property rights in the works invented, created or developed pursuant to
      the performance of his duties at the request of the Employer are invented,
      created or developed on behalf and for the exclusive benefit of the
      Employer and that all industrial and intellectual property rights in such
      works are therefore the sole and exclusive property of the
      Employer.  The Employee hereby assigns to the Employer
      absolutely all such industrial and intellectual property rights in such
      works together will all modifications and amendments thereto which have
      been or will at any time in the future invested, created or
      developed.

              


      

      


      
        	
                3.6

              	
                The
      Employee undertakes at the request and expense of the Employer to do all
      acts and execute all documents which may be necessary to confirm the title
      of the Employer to the industrial and intellectual property rights in the
      work as provided in clause 3.5 above whether in connection with
      registration of such title or
otherwise.

              


      

      


      
        	
                4. 
      

              	
                WORKING
      HOURS

              


      

      


      
        	
                4.1

              	
                The
      Employee shall devote himself exclusively and diligently to the business
      and interests of the Employer at all times during usual business hours and
      during such other times as the Employer may reasonably require except in
      case of incapacity through illness or accident or any other reasonable
      cause.

              


      

      


      
        	
                4.2

              	
                In
      general terms the Employee will allocate his work time as
      follows:

              


      

      


      
        	
                ·  

              	
                40%
      undertaking his duties and responsibilities as they relate to Pacific Asia
      Petroleum Inc,, Pacific Asia Petroleum Ltd (Hong Kong) and Inner Mongolia
      Petroleum Company (HK) Ltd.

              


      

      
        	
                ·  

              	
                20%
      undertaking his duties and responsibilities as the Chief Representative of
      Pacific Asia Petroleum Ltd’s Beijing Representative Office in
      China.

              


      

      
        	
                ·  

              	
                25%
      undertaking his duties and responsibilities as the Responsible Person
      related to the various Production Sharing Contracts entered into by
      Pacific Asia Petroleum Ltd within
China.

              


      

      
        	
                ·  

              	
                15%
      undertaking his duties and responsibilities as required to manage the
      Chinese interests of Inner Mongolia Petroleum Company Ltd including the
      Inner Mongolia Sunrise Petroleum
JV.

              


      

      


      
        	
                4.3

              	
                The
      Employee shall be entitled to all holidays he is entitled under the
      applicable laws and regulations and as established by the
      Employer.

              


      

      


      


       

      
        	5. 	REMUNERATION


      

       

      As
remuneration for his services hereunder, the Employee shall be entitled to
receive for so long as his employment hereunder shall continue:

      


      
        	
                5.1

              	
                a
      fixed salary at the rate of one million six hundred fifty thousand RMB
      (1,650,000 RMB) per full year of employment, such salary to be payable pro
      rata monthly in arrears in accordance with the Employer’s normal payroll
      policies, and to be deposited into such bank account as specified by the
      Employee in writing (“Base Salary”). Such Base
      Salary will be paid to the Employee without deduction of tax (except as
      provided in clause 9.3 or where tax regulations require the Employer to
      withhold tax and pay it to relevant tax authorities on behalf of the
      Employee) or other deductions and in such currency as the Employee may
      request from time to time based on the average exchange rate for the month
      for which the salary is due.

              


      

      


      
        	
                5.2

              	
                the
      Employee will be entitled to an annual performance-based bonus award
      targeted at between 30% and 40% of Employee’s then-current annual Base
      Salary, awardable in the discretion of the Employer’s Board of
      Directors.

              


      

      


      
        	
                5.3

              	
                the
      Employee shall be reimbursed a maximum of 30,000 RMB per month for
      accommodation expenses in Beijing, China upon the production of
      appropriate receipts and documentation
thereof.

              


      

      


      
        	
                5.4

              	
                the
      Employee shall be reimbursed in a currency of his choice the equivalent to
      a maximum of 4,500 RMB per month to provide medical insurance for the
      Employee and the Employee’s
partner.

              


      

      


      
        	
                5.5

              	
                the
      Employee shall be entitled, as a performance incentive and at the sole
      discretion of the Employer’s Board of Directors, to participate in the
      Employer’s 2007 Stock Plan.

              


      

      


      
        	
                5.6

              	
                the
      Employee shall be entitled to participate in the Employer’s 401(k)
      program, or an equivalent program if offered by the Employer, if the
      Employee is not able to participate because he is not a U.S.
      citizen.

              


      

      


      
        	
                5.7

              	
                the
      Employer agrees that the Employee shall be entitled to be reimbursed
      out-of-pocket expenses exclusively incurred in the performance of this
      Agreement in accordance with the Employer’s expense policies, and provided
      further that the Employee shall fly in business class travel for all
      international flights, except flights between Beijing and Hong
      Kong.

              


      

      


      
        	
                5.8

              	
                The
      Employee shall be entitled to reimbursement for all of his taxi and
      similar local transportation costs.

              


      

      


      
        	
                5.9

              	
                  The
      Employer will work with the Employee in establishing and paying for an
      international SOS membership for the Employee and the Employee’s
      partner.

              


      

      


      
        	
                6. 
      

              	
                ANNUAL LEAVE /
      VACATION

              


      

      


      
        	
                6.1

              	
                The
      Employee shall be entitled hereunder to a paid annual leave totaling 30
      working days during each calendar year, to be taken from time to time as
      mutually agreed with the Employer.  For the avoidance of doubt,
      the Employee will be entitled to 30 days leave in
  2008.

              


      

      


      
        	
                6.2

              	
                The
      Employee shall be entitled to a fixed reimbursement of expenses for annual
      leave for each calendar year in the amount of 160,000
  RMB.

              


      


      
        
           


        

        
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                6.3

              	
                All
      annual leave must be taken within 12 months following the calendar year in
      which it is earned, otherwise, it shall be forfeited unless mutually
      agreed otherwise between the Employer and the
  Employee.

              


      

      


      The
outstanding annual leave cannot be used as deduction of the termination notice
period.

      


      


      
        	
                7. 
      

              	
                SICK
      LEAVE

              


      

      


      
        	
                7.1

              	
                The
      Employer currently has no sick leave policy, however the Employee shall be
      entitled to a minimum paid sick leave of 10 days per calendar year or such
      great number of days as maybe mutually agreed between the Employer and the
      Employee from time to time

              


      

      


      
        	
                7.2

              	
                Any
      untaken sick leave will accrue from year to
  year.

              


      

      


      


      
        	
                8.

              	
                TERMINATION

              


      

      


      
        	
                8.1
      

              	
                Termination
      and Payments Upon Termination.

              


      

      


      
        	
                (a)

              	
                Employee
      or the Employer may terminate this Agreement for any reason or for no
      reason at all at any time, with or without Cause (as defined below),
      during or after the Term, by providing the other party with notice of
      termination as provided in Section 8.1(c).  The Employer
      shall pay Employee his Base Salary and all other amounts, in each such
      case, actually earned, accrued or owing as of the date of termination but
      not yet paid to Employee through the date of termination; provided that if
      the Employee is terminated by the Employer without Cause (as defined
      below) after the date of this Agreement, then, in addition to the payments
      described in this Section 8.1(a), the Employer shall pay Employee a
      lump sum payment in an amount equal to fifty percent (50%) of
      Employee’s then-current annual Base Salary at the time he is terminated.
      The payment of the lump sum amount under this Section 8.1(a) shall be
      made on the earlier of the date ending on the expiration of thirty days
      following the earlier of the date of termination of Employee’s employment
      or the death of the Employee; provided that notwithstanding the foregoing,
      to the extent any payment under this Section 8.1(a) is “nonqualified
      deferred compensation” and/or the Employee is considered a “key employee”
      of the Employer within the meaning of Section 409A of the Internal
      Revenue Code and the Treasury Regulations promulgated thereunder, then
      such payment shall be made on the date ending on the expiration of the
      sixth month following the earlier of the date of termination of Employee’s
      employment or the Employee’s death.

              


      

      


      
        	
                (b) 
      

              	
                For
      purposes of this Agreement, “Cause” shall mean (i) Employee’s gross
      and willful misappropriation or theft of the Employer’s or its
      subsidiary’s or affiliate’s funds or property, (ii) Employee’s
      commission of any fraud, misappropriation, embezzlement or similar act,
      whether or not a punishable criminal offense, or Employee’s conviction of
      or entering of a plea of nolo contendere to a charge of any felony or
      crime involving dishonesty or moral turpitude, (iii) Employee’s
      engagement in any willful conduct that is injurious to the Employer or its
      subsidiaries or affiliates, (iv) Employee’s material breach of this
      Agreement or failure to perform any of his material duties owed to the
      Employer or its subsidiaries or affiliates, or (v) Employee’s
      commission of any act involving willful malfeasance or gross negligence or
      Employee’s failure to act involving material
  nonfeasance.

              


      


      
        
           


        

        
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                (c) 
      

              	
                Any
      termination of this Agreement by the Employer or by Employee shall be
      communicated in writing to the other party before the date on which such
      termination is proposed to take effect and, unless otherwise agreed to by
      the Employer and the Employee, shall be effective sixty  (60)
      days after such notice, except that there shall be no 60 day notice period
      in the event of Employee’s termination for “Cause” by the
      Employer

              


      

      


      
        	
                (d)

              	
                From
      and after the termination of this Agreement by the Employer or by the
      Employee, the Employee agrees to do or cause to be done all other things
      and acts, to execute, deliver, file and perform or cause to be executed,
      delivered, filed and performed all other instruments, documents and
      certificates as may be reasonably requested by the Employer or are
      necessary, proper or advisable in order to effect the removal, transition,
      substitution or modification of the Employee as an officer, agent,
      affiliate, director, manager or authorized representative of the Employer
      or any other positions that the Employee holds with the Employer or its
      subsidiaries or affiliates providing the cost of doing such things is paid
      for by the Employer.

              


      

      


      
        	
                8.2

              	
                Termination
      of the Employee’s employment and appointment hereunder shall be without
      prejudice to any rights which have accrued to the Employer at the time of
      termination pursuant to Sections 3.4 through 3.6, Section 14 and this
      Section 8 (which shall remain in full force and
  effect).

              


      

      


      
        	
                 
      9.

              	
                MISCELLANEOUS

              


      

      


      
        	
                9.1

              	
                During
      the continuance of his employment hereunder, the Employee shall not accept
      or solicit any commission or gift of any kind from contractors, suppliers
      or clients of the Employer.

              


      

      


      
        	
                9.2

              	
                The
      Employee shall indemnify and hold the Employer harmless from any
      actions,    claims or assessments of any nature
      relating to any of his/her business or personal affairs unrelated to his
      employment hereunder.

              


      

      


      
        	
                9.3

              	
                The
      Employee is responsible for any personal tax obligations arising in China
      or elsewhere during the continuance of his employment. Where requested by
      the Employee, the Employer will make agreed deductions of tax and pay it
      on the Employees behalf to the relevant Chinese tax authorities and
      provide suitable certificates to substantiate such
    payments.

              


      

      


      
        	
                9.4

              	
                This
      Agreement shall not be determined or affected by any change in the
      composition of the Employer and the Employee as long as the Employer shall
      continue in business unless and until terminated as herein
      provided.

              


      

      


      
        	
                9.5

              	
                In
      conformity with the United States Foreign Corrupt Practices Act and the
      Employer’s guidelines related thereto, the Employee represents and
      warrants that he shall not directly or indirectly make an offer, payment,
      promise to pay, or authorize payment, or offer a gift, promise to give, or
      authorize the giving of anything of value for the purpose of influencing
      an act or decision of an official of any government or the United States
      government (including a decision not to act) or inducing such a person to
      use his influence to affect any such governmental act or decision in order
      to assist the Employer, or any subsidiary or affiliate thereof, in
      obtaining, retaining or directing any such
  business.

              


      


      
        
           


        

        
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      10.

              	
                ENTIRE
      AGREEMENT

              


      

      


      
        	
                10.1

              	
                This
      Agreement is intended to be the final, complete, and exclusive statement
      of the terms of Employee’s employment by the Employer.  Except
      for any stock option, restricted stock purchase or confidentiality
      agreements that have been entered, or may be entered into in the future,
      by and between the Employer and the Employee, this Agreement supersedes
      all other prior and contemporaneous agreements and statements pertaining
      in any manner to the employment of Employee and it may not be contradicted
      by evidence of any prior or contemporaneous statements or
      agreements.  To the extent that the practices, policies, or
      procedures of the Employer, now or in the future, apply to Employee and
      are inconsistent with the terms of this Agreement, the provisions of such
      practices, policies or procedures shall control. The Employee and the
      Employer explicitly agree that this is a new employment agreement between
      them, and that all agreements that may have existed between them before
      the employment of, or consulting engagement with, the Employee have been
      terminated and fully satisfied.

              


      

      


      
        	
                10.2

              	
                If
      at any time any provision hereof is or becomes illegal, invalid or
      unenforceable in any respect, neither the legality, validity nor
      enforceability of the remaining provisions hereof shall be in any way
      affected or impaired hereby.

              


      

      


      
        	
                10.3

              	
                This
      Agreement may not be modified or amended except by a written agreement,
      signed by an officer of the Employer and by the
  Employee.

              


      

      


      
        	
                11.

              	
                GOVERNING LAW AND
      ARBITRATION

              


      

      


      
        	
                 11.1

              	
                Governing
      Law.  This Agreement shall be governed by the laws of England and
      Wales. If one or more provisions of this Agreement are held to be
      unenforceable under applicable law, the parties agree to renegotiate such
      provision in good faith.  In the event that the parties cannot
      reach a mutually agreeable and enforceable replacement for such provision,
      then (i) such provision shall be excluded from this Agreement,
      (ii) the balance of the Agreement shall be interpreted as if such
      provision were so excluded and (iii) the balance of the Agreement
      shall be enforceable in accordance with its
  terms.

              


      

      


      
        	
                11.2

              	
                Arbitration.   Any
      dispute or claim arising out of or in connection with any provision of
      this Agreement will be finally settled by binding arbitration in London,
      England, in accordance with the rules of the International Chamber of
      Commerce ("ICC") by one arbitrator appointed in accordance with said
      rules.  The arbitrator shall apply English law, without
      reference to rules of conflicts of law or rules of statutory arbitration,
      to the resolution of any dispute.  Judgment on the award
      rendered by the arbitrator may be entered in any court having jurisdiction
      thereof.  Notwithstanding the foregoing, the parties may apply
      to any court of competent jurisdiction for preliminary or interim
      equitable relief, or to compel arbitration in accordance
      with this paragraph, without breach of this arbitration
      provision.

              


      


      
        
           


        

        
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                12.

              	
                ADVICE OF
      COUNSEL.  EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS
      AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY TO SEEK THE ADVICE OF
      INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS
      AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT SHALL NOT BE
      CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION
      HEREOF.

              


      

      


      
        	
                13.

              	
                

                  NOTICES. 
      Any notice, request, or other communication required or permitted
      pursuant to this Agreement shall be in writing and shall be deemed duly
      given when received by the party to whom it shall be given or three days
      after being mailed by certified, registered, or express mail, postage
      prepaid, addressed as follows:

                

              


      

       

      If to
Employer:

      Pacific
Asia Petroleum, Inc.

      250 East
Hartsdale Ave

      Suite
47

      Hartsdale,
New York 10530 USA

      Attention:
Chief Executive Officer

       

      If to
Employee:

      Richard
Grigg

      Unit 10
E, 10/F,

      Kaiser
Est.

      1, 41 Man
Yue Street,

      Hung
Hom,

      Kowloon,

      Hong
Kong

      


      or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

      


      
         

        
          	14.	NON-COMPETITION


        

            

      

      


      
        	
                14.1

              	
                In
      consideration of the Employer’s willingness to enter into this Agreement,
      the Employee agrees that while this Agreement is in effect and for 12
      months after its termination, the Employee will not accept any employment
      or engage in any activity, without the written consent of the Board, if
      the loyal and complete fulfillment of the Employee’s duties in such
      employment would inevitably require him to reveal or utilize Confidential
      Information, as reasonably determined by the
  Board.

              


      

      


      
        	
                14.2

              	
                By
      agreement between the parties at any time the terms of this clause may be
      varied, reviewed or modified so long as any such variation, review or
      modification is in writing and signed by both
  parties.

              


      

      


      IN WITNESS WHEREOF this
Agreement has been entered into the day and year first above
written.


      
        
           


        

        
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          	For
      and On behalf of	 	 
	Pacific Asia Petroleum,
      Inc. 	/s/ Frank C.
      Ingriselli 	 
	 	 	 
	 	 	 
	Signed by Richard
      Grigg 	/s/ Richard
      Grigg 	 
	 	 	 


        

         

      


      
        
           


        

        
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